Things you may want to know about Credit Monitoring
With the economic situation presenting people with ongoing financial challenges and identity theft on the rise, credit monitoring is a popular product. In fact, Americans pay nearly $1 billion annually for the service. However, even though it is a major financial expenditure, not everyone fully understands the service. By learning more about the history of credit monitoring, the basic features of credit monitoring, the major providers of credit monitoring and the modern developments around credit monitoring, you will be able to be an informed consumer when it comes to credit monitoring products.
History of credit monitoring
Credit monitoring is a relatively recent development in the financial marketplace. In the past, most people had only a vague idea about their credit, and would typically learn the details when they went to apply for a loan for a car or a house. However, in the last 15 – 20 years, as identity theft and fraud on consumer accounts has skyrocketed, so has the interest in knowing what your credit score is at all times.
Credit monitoring was initially developed to help victims of fraud keep an eye on their accounts to prevent further damage. However, after the passage of the 2005 FACT act, which entitles consumers to one free credit report each year from the major agencies, credit monitoring was thrust into the public spotlight. Many consumers who had never previously considered keeping an eye on their credit scores developed a strong interest in the service, and this keen interest has brought many different credit monitoring products into the marketplace.
Basic features of credit monitoring
The basic premise of credit monitoring is to track your credit score and provide you with regular updates about your credit transactions. Toward this end, most services provide updates at designated intervals about new lines of credit, credit transactions, and shifts in your credit scores. The regularity of these updates is determined by how much you are willing to pay for the service.
Billing for credit monitoring services is typically set up as a recurring monthly charge. Other providers may offer discounts for yearly package purchases. The fees associated with credit monitoring can be as low as $9.95 monthly or run to several hundred dollars per year depending on how many and what type of accounts are being monitored.
Many credit monitoring programs also offer fraud alert notification systems. These systems work by sending alert emails or texts to consumers when suspicious activity in their accounts is noticed by the tracking system. These features are most generally sought by those who have been victims of identity fraud.
Major providers of credit monitoring
Credit monitoring services have proven to be a very valuable product for financial services institutions, credit card providers, and consumer groups. As a result, there are many players in the market, some of which are more altruistic than others.
The majority of credit monitoring services are offered by credit card companies. The big three—Experian, TransUnion, and Equifax—dominate the marketplace both in terms of consumers enrolled in programs and dollars billed for services. Though some advocacy groups object, other feel this is only a natural extension of the credit bureaus place in the market.
Other providers of credit monitoring services include banks, who may offer the service as a part of account security packages, and consumer groups targeting victims of identity theft. Debt relief groups and credit card management agencies may also offer the service in your area.
Modern developments around credit monitoring
As a newer product in the marketplace, credit monitoring is continually evolving. Some of this evolution is mandated by the government, while other developments are in response to consumer demand. Most of the developments take place in the fine print, so it pays to be an attentive consumer.
Most developments are driven by an ongoing push for transparency in credit scoring and credit services. Consumers want to know what other people know about them and how others feel about them in a financial sense. By forcing companies to peel back the veil, credit monitoring services meet this need. It also drives innovation in the areas of real time fraud alert and instant access to credit information at any hour.
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